New Zealand Post seeks flexibility for the future

New
Zealand Post has welcomed the release of its proposal and
discussion document regarding postal services for public
submissions.

The document has been released by
Communications and Information Technology Minister Amy Adams
and is available on the Ministry of Business, Innovation and
Employment (MBIE) website www.mbie.govt.nz (click on the „Have Your Say
link).

The document contains New Zealand Posts
proposal to update the Deed of Understanding (“the
Deed”) it has with the Government regarding standard
letter delivery and postal outlet services.

The current
Deed was last significantly updated in 1998, some 14 years
ago, at a time which pre-dated the digital revolution. That
revolution has resulted in the rapid expansion of
internet-based products and services which have
fundamentally changed the way people communicate, do
business and shop.

The last decade has seen an
unprecedented drop in mail volumes. There was 24 percent
less mail (265 million fewer items) posted in 2012 than a
decade before in 2002. Within five years mail volumes are
forecast to decline further, to just over 600 million items
– in other words, just 50 percent of the mail volume in
2002.

New Zealand Post Group CEO Brian Roche says the
current Deed no longer reflects the current use of New
Zealand Posts services, or the impact technology has made
as a substitute. Mr Roche says the Deed is in urgent need of
a revamp to ensure New Zealanders continue to have access to
a sustainable, viable, postal service network that meets
their changing requirements.

“The time is now to make
the necessary decisions for the future. Every postal system
around the world is facing similar challenges and they are
beginning to act. We cannot stand still and simply hope the
problems will go away.

“We are seeking an agreement
that gives us the flexibility and certainty to be able to
plan for that future. Without that flexibility, standard
letter mail and postal outlet services will incur
significant losses.

“Not gaining flexibility will leave
us with some challenging and unsustainable options –
asking for taxpayer funded subsidies to prop up the letters
business; operating the postal business at a loss which will
degrade the business over time; or cross-subsidising from
other parts of New Zealand Post, denying the business the
opportunity to grow and invest.

“The document released
today clearly outlines the rationale for change and what we
need to do to ensure our letters business has a future. We
have exhausted the short term fixes the 1998 Deed allows,”
Mr Roche said.

He said New Zealand Post has engaged with
key stakeholders including business, the rural sector and
groups representing older New Zealanders about the future of
postal services, and will continue to do so.

“The
public submission process over the next six weeks will
further inform the decision on the final nature of the
agreement with the Government.

“We believe the
agreement should focus on ensuring customers can access
services, not on requiring services to be provided in a
particular way as the current 1998 Deed prescribes,” he
said.

Mr Roche emphasised the proposed new Deed was not a
business plan, but rather the framework which would provide
the parameters for those plans to be created, and
implemented over time.

“We are not about to reduce
letter mail delivery frequency immediately. It is, however,
inevitable at some point in the future that there the need
to reduce standard letter mail delivery frequency.

“Getting flexibility now will ensure we can plan
clearly, and inform consumers, the business sector and other
key stakeholders well in advance of any changes.

“We
understand that these proposed changes will, over time,
impact on our customers, users and employees. However the
influence of technology will continue and may well
accelerate. It will not, in our view, go away, and nor will
the challenges we face. Hence, our proposal is to manage
these challenges proactively, so we can maintain a viable
and dependable network,” Brian Roche said.

The New
Zealand Post discussion document and details of how to make
submissions can be viewed at the MBIE website
www.mbie.govt.nz.

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